Surface Ripples

The Men At The Top: John Varley

The reason for this is that I was asked to write on the “men at the top” of the UK’s banks, given the changes that have been announced at Barclays, HSBC and Lloyds Banking Group.

My first task was to decide whom to write about – and which would be the UK’s “top” banks. A re-hash of CVs would be interesting, but what else could I add? The answer for me was to look at them as a whole to see where the commonalities and differences might lie.

In the end, I chose four banks: Barclays, HSBC, Lloyds Banking Group and RBS. These dominate the UK financial landscape for a number of reasons. What’s more, by the end of 2011, all will have changed their men at the top from those who saw the beginnings of the crisis. Yes, there are others (e.g. the newly-started Metro Bank and Virgin Bank), but none cast quite the shadow that the “gang of four” (to coin a phrase) do. These will be the subject of review later. I have also chosen not to include Santander as this group is officially headquartered in Spain, despite its vast interests in the UK.

Over the next weeks I’ll be looking at each of the men at the top (and, in some cases, their replacements). I’ll only be using information that’s in the public domain, so there’ll be no “secret interviews”. We start with John Varley at Barclays.

John Varley was born in 1956; his father was a solicitor. He was educated at Downside School, Oriel College, Oxford (where he took first-class honours) and then London’s College of Law. He started professional life as a solicitor in 1979, so there seems to have been a different plan for his career at the start. Things changed when in 1981, he married Carolyn Thorn Pease, daughter of Sir Richard Thorn Pease. This family established the Stockton and Darlington Railway and their bank became part of Barclays in 1902.

The next year, John Varley joined Barclays in the Corporate Finance Department of the then Barclays Merchant Bank. Senior appointments followed with the successor bank, BZW (now Barclays Capital), included Deputy Chief Executive of BZW's Equity Division and head of BZW's offices in South East Asia. In 1995 he became Chairman of the Asset Management Division and from April 1998 to October 2000 was Chief Executive, Retail Financial Services. He joined the main Barclays board on 5 June 1998 1998 and was Group Finance Director from 2000 until the end of 2003.

On 1 January 2004, he became Group Deputy Chief Executive of Barclays and was made Group Chief Executive in September 2004. Since then, he has tried to buy ABN AMRO (and must be thanking his lucky stars that the RBS consortium pipped him at the post), has seen the UK reel from the worst financial crisis it has ever known and presided over well-publicised sales of shares to Asian and Middle East buyers (one of whom lost a reported £800million on its investment). He also closed the Barclays final salary pension scheme in 2009 to save about £150millon a year and to remove the potential for an actuarial deficit of £2.2billion growing into an even larger one. Barclays has not required government assistance, along with HSBC and retains its independence.

Varley is clearly an extremely bright, able and tough individual who has made it to the top of one of the UK’s most respected financial institutions. His educational background suggests “traditional” as do his stated hobbies of walking and fishing. However, this impression is belied by his willingness to pursue adopt out-of-the-box (if not controversial) courses of action should the need arise.

His compensation for 2009 was reported to be approximately £1million. Justified, considering the shape in which he leaves Barclays, and in line with his peers.

Varley is to be succeeded in March 2011 by Bob Diamond - currently President of Barclays PLC and Chief Executive of Corporate & Investment Banking and Wealth Management – who will be the subject of another article. Varley appreciates Diamond’s contribution to Barclays’ success and is quick to point this out when needed.

Labels: Career, Financial, Strategy

posted by William Martin @ 20:38